Agricultural Commodities CBOT Grain Commodity Futures

Learning about each particular commodity is an important step before you begin trading commodities. Each commodity profile includes the basics of contract specifications, the fundamentals, important market reports for that commodity and trading tips.

Grains

Many of the grain commodities have been trading on futures exchanges have been around many decades and they are some of the most active markets to trade. They tend to be most volatile during the summer months as whether can be a big market mover.

Corn

Soybeans

Wheat

The terms “commodities” and “futures” are often used to describe commodity trading or futures trading. You can think of them as generic terms to describe the markets. It is similar to the way “stocks” and “equities” are used when investors talk about the stock market. Commodities are the actual physical goods like corn, soybeans, gold, crude oil, etc. Futures are contracts of commodities that are traded at a futures exchange like the Chicago Board of Trade (CBOT). Futures contracts have expanded beyond just commodities; now there are futures contracts on financial markets like the S&P 500, t-notes, currencies and many others.

Futures are standardized contracts among buyers and sellers of commodities that specify the amount of a commodity, grade / quality and delivery location. Commodity trading with futures contracts takes place at a futures exchange and is entirely anonymous.

Introduction to Grains and Oilseeds

Course Overview

Today’s agriculture markets are highly complex. Agricultural grain futures and options provide the tools the industry needs to manage risk and help put food on the table for a growing global population. Gain an understanding of the fundamentals that affect supply and demand in the grain and oilseed markets. Find out how futures and options provide critical price discovery and risk management roles for a variety of market participants, from farmers, ranchers, processors, distributors, wholesalers, retailers, traders and more. Discover the ways these contracts can fit into your portfolio.

Players Involved in Commodities Trading

There are three different types of players in the commodity markets:

1. Commercials: The entities involved in the production, processing or merchandising of a commodity. For example, both the corn farmer and Kellogg’s from the example above are commercials. Commercials account for most of the trading in commodity markets.

2. Large Speculators: A group of investors that pool their money together to reduce risk and increase gain. Like mutual funds in the stock market, large speculators have money managers that make investment decisions for the investors as a whole.

3. Small Speculators: Individual commodity traders who trade on their own accounts or through a commodity broker. Both small and large speculators are known for their ability to shake up the commodities market.

How to Start Trading Commodities

In order to trade commodities, you should educate yourself on the futures contract specifications for each commodity and of course learn about trading strategies. Commodities have the same premise as any other investment – you want to buy low and sell high. The difference with commodities is that they are highly leveraged and they trade in contract sizes instead of shares. Remember that you can buy and sell positions whenever the markets are open, be assured that you don’t have to take delivery of a truckload of soybeans.